The Central Bank of Russia will agree to legalize cryptocurrency mining, provided the proceeds from the activity are converted into fiat currency outside Russia. The regulator’s latest position on the matter comes after it softened its stance on the possibility of using cryptocurrencies for payments, even internationally.
Russia’s central bank to allow legalization of cryptocurrency mining
Monetary authorities in Moscow are now ready to support the legalization of crypto-mining, provided that Russian miners are obliged to sell coins obtained in the process outside the country. This is according to a recent statement by Kirill Pronin, head of the Bank of Russia’s Financial Technology Department.
The central bank has been a strong voice in the ongoing debate on the future of cryptocurrencies in Russia, proposing a total ban on most related activities, including mining, earlier this year. However, in the face of opposition from other government agencies and having to deal with financial restrictions imposed by the war in Ukraine, its position is beginning to change.
President Elvira Nabiullina noted last month that crypto payments could be allowed if they do not “infiltrate” the Russian financial system. At the same time, she argued that digital currencies like bitcoin should not be traded on Russian platforms because these assets are too unstable and dangerous for potential investors.
This week, at the St. Petersburg International Legal Forum, Pronin said that while mining does not fall under the responsibility of the Central Bank of Russia (CBR), it is in the form of fees for the verification of crypto transactions performed by the miners, and obtaining cryptocurrency We pointed out that it is one of the ways.” He was quoted as saying by Interfax that “legalization of mining can be discussed, but in our opinion, some conditions must be met in this regard.
Ivan Chebeskov, director of the Ministry of Finance’s Financial Policy Department, noted that several large crypto mining companies based in the Russian Federation have also been forced to deal with foreign regulations when withdrawing funds. He suggested that Russia may need to create its own exchange infrastructure to provide liquidity to the industry.
However, Kirill Pronin reiterated that, according to the CBR, cryptocurrencies minted by miners within Russia should be sold outside its borders and not allowed to accumulate in the country. The point is to avoid creating incentives for subsequent use for domestic payments.
In addition to the new bill “On Digital Currency,” which is expected to comprehensively regulate the crypto space in Russia, a dedicated draft law “On Mining in the Russian Federation” was submitted to the State Duma in April. Members of the lower house of the Russian parliament propose to recognize crypto mining as a business activity that uses Russian information infrastructure and equipment located in the country.
Image credits: Shutterstock, Pixabay, Wiki Commons
